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OpenText acquires HP customer experience content management for $170 million

TechCrunch TechCrunch 18/04/2016 Ron Miller

OpenText, the Canadian content management company, announced today that it was buying much of the customer experience content management business from HP Inc, the consumer printer business that emerged after the HP split last year.

The deal was for approximately $170 million, according to a statement released by OpenText. What’s more OpenText expects the assets to generate between $85 million and $95 million in the first year, meaning the company could break even after two years if those figures are accurate.

It was quite a bargain when you consider that SiteCore recently sold a majority stake in its content management for over a billion dollars to a private equity firm.

The package of products sold to OpenText today come from the HP Engage line and includes HP TeamSite, a web content management tool left over from the purchase of Interwoven (which was actually bought by Autonomy before Autonomy was sold to HP), HP MediaBin, a digital asset management solution, HP Qfiniti, a workforce optimization solution for enterprise contact center management, as well as HP Explore, HP Aurasma, and HP Optimost.

Interestingly these pieces weren’t included in the HPE part of the company during the split, where it would have made more sense. Perhaps that’s because HPI intended to sell these pieces all along, says Scott Liewehr, principal at Digital Clarity Group.

“Why pair it with printers? In our view at DCG, we assumed this meant they’d be selling it off as soon as they could find a buyer. It’s been pretty public knowledge that HP has had buyer’s remorse from the Interwoven acquisition for quite some time,” Liewehr said.

Tony Byrne, principal at Real Story Group, consultancy that follows content management put deal into perspective on his company blog:

The most important thing to understand, though, is that as a vendor OpenText is a financial construct in search of a technology rationale. The company follows a “roll-up” strategy: purchasing older tools for their maintenance revenue streams, streams which — while not always large — are almost always very profitable.

Liewehr agreed with that assessment adding that OpenText sees this as part of their Enterprise Information Management (EIM) strategy. Meet the old enterprise content management in a new guise.

“If you listened to the story they told last week in Boston at their launch of Release 16, [OpenText CEO] Mark Barrenechea strongly believes that EIM is the next ERP, and that it should absolutely be a single stack. With TeamSite [and the rest of the assets in this] acquisition, they now have that many more customers to call on and try to sell that story to. That said, none of this is really EIM per se. But if the customer was on TeamSite, they’re likely large, complex, and ripe for EIM from OpenText,” he said.

Aurasma is actually an augmented reality piece, but it’s not clear if that was throw-in or if OpenText will actually do anything with it other than spin it off or kill it.

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